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Juniors crashed by gold slump
Juniors crashed by gold slump
The junior gold miners’ and explorers’ stocks have been crushed in recent months, collateral damage from enormous gold-futures selling. That’s naturally left investors and speculators extremely bearish on gold juniors. But lost in all this technical and sentimental tumult are important fundamentals from the juniors’ recently-reported third-quarter financial and operational results, which proved quite strong and bullish.
The junior gold stocks are rightfully considered the Wild West of the gold sector. Most of the hundreds and hundreds of these small companies won’t prove successful. They won’t be able to secure funding to explore sufficiently, won’t be fortunate enough to find an economic deposit of gold to mine, or won’t be able to make the herculean leap from explorer to miner. The odds are stacked heavily against the gold juniors.
Nevertheless, the elite small gold explorers and miners able to overcome and grow their businesses to larger scales will see truly-enormous stock-price gains. The gold juniors are exceedingly important for the entire gold-mining industry, since they feed the critical gold-supply pipeline with new deposits and mines to offset the inexorable industry-wide depletion of current operations. Success here is radically rewarded.
Some of the world’s best junior gold miners and explorers are included in the GDXJ VanEck Vectors Junior Gold Miners ETF, this sector’s leading benchmark. Born in November 2009, GDXJ is the world’s second-largest gold-stock ETF after its big brother GDX which tracks the larger major gold miners. As of the middle of this week, GDXJ’s net assets ran about 4/10ths of GDX’s. That testifies to junior golds’ popularity.
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